Trump Hammers Silicon Valley To Renegotiate Chips Act

Written by Chriss W. Street

President Trump is hammering Silicon Valley to renegotiate former VP Kamala Harris’ disastrous 2022 CHIPS & Science Act that had awarded $56 billion in taxpayer cash and $100 million in tax abatement to build huge commodity semiconductor foundries in 2024 battleground states.

Democrat Harris’ campaign in the run-up to the 2024 November elections, was touting her ability to reindustrialize America by highlighting that two-thirds of the Chips Act incentivizes were awarded to Intel Corporation.

The company had broken ground in Ohio and Arizona to buildnew semi-conductor foundries that Harris claimed would create nearly 20,000 construction jobs, employ 10,000 workers, and force its multi-national suppliers to re-shore 50,000 indirect jobs in supporting industries.

But the Mountain Top Times reported in August that although Intel once was the dominated the global market for processors for datacenters and still owned 15 chip foundries, the company was getting hammered domestically by NIVIDA and internationally by Taiwan Semiconductor Manufacturing Co (TSMC).

MMT projected that with just $29.3 billion in cash and short term investments and burning over $10 billion per quarter, Intel would be bankrupt in about 9 months. Having already received$12.5 billion of CHIPS Act taxpayer cash, Intel blindsided Harris by announcing that its CEO had resigned and the company was slashing 15,000 jobs.

After winning the Presidency, popular vote and both houses of Congress in November, Trump has been playing hardball to force a restructuring of the CHIPS Act by threatening Taiwan-based TSMC with sky high tariffs.

As a businessman, Trump understood that Biden valuing Intel based on each of its 15 money-losing foundries being worth their $10 billion cost to build, was preposterous. Because of the specialization and certification standards for each facility, liquidations would be subject to a 60% haircut.

The Trump team forced TSMC, that had been waiting for Intel to collapse, to offer taking control of the 15 Intel manufacturing operations, and spend big money to drastically increase their technical competitiveness.

TSMC also committed to begin building global state-of-the-art2-nanometer (2nm) semiconductors in Arizona by later this year. The new chips will be featured in smartphones, AI systems, and high-performance computing.

With operations stabilized, the Trump team just recruited Silicon Valley based Broadcom to potentially take Intel chip design operations. Furthermore, combining TSMC manufacturing and Broadcom design would be the first competitive threat to NVIDIA’s dominance of artificial intelligence chip design.